TOBACCO SELLERS NEAR STATE LINE WELCOME PROP. 10

Crush of tax-weary smokers anticipated

Jesse Uras smokes half a pack of cigarettes a day and says he wouldn't
think twice about driving a few miles out of his way to save money on
them.

``If you're talking about 50 cents a pack, it would make quite a
difference,'' said Uras, manager of a Chevron station in Yuma, Ariz.,
just across the state line from California.

Uras is one of several retailers looking toward a 50-cent-a-pack tax
hike, courtesy of Proposition 10, in January. The retailers are hoping
for a windfall from Californians they expect will drive to Arizona,
Nevada or Oregon to stock up and save.

Proposition 10 was approved by a margin of 57,070 votes among more
than 7.6 million ballots counted.

Backers expect it to raise $700 million annually for social services
aimed at families with children under age 5, including prenatal care,
stop-smoking programs, immunizations and domestic-violence prevention.
It raises prices on all tobacco products, not just cigarettes.

Ann Wright, spokeswoman for the American Cancer Society in Sacramento,
one of the chief supporters of the initiative, said the tax could
raise the price of a 10-pack carton to as much as $30 in California.
Because cartons are available for around $21 at several businesses
just across the state line, retailers there expect Californians will
be eager to make the drive.

Proposition 10 opponents argued it would cause black market cigarette
sales in California. Mark Smith, spokesman for the Louisville,
Ky.-based Brown & Williamson Tobacco Corp., said people will cross
state lines to buy cartons and re-sell them in California. He said his
company is trying to discourage such action.

``You'll probably see record levels of contraband in the state,'' he
said.

Wright said the increase targets young smokers who don't have the
means to leave California.

``I don't see any 11- or 12-year-olds driving to Nevada,'' she
said.

Backers hope the price increase will persuade smokers to quit, not
cross state lines, she added.

But Paul Garcia, manager of the Avi Smoke Shop on the Fort Mojave
Indian Reservation near Laughlin, Nev., said many of his California
customers already have promised to visit more often because of the tax
increase.

``They said they're going to start coming out here once a month to
enjoy themselves and pick up cigarettes, too,'' he said.

Mike Eittreim, manager of Cy's Supermarket in Malin, Ore., less than
two miles across the California state line, said a Philip Morris
representative visited his store Wednesday with plans to help him snag
California smokers.

``They're even giving us promotional dollars to try to get some
California business,'' Eittreim said.

Until January, the company will pay Eittreim $3 for every 10-pack
carton he sells so that he can lower prices from $23.89 to $20.89 a
carton, Eittreim said. Several other area stores are getting the same
deal, he said.

Brendan McCormick, a Philip Morris spokesman, said he didn't know what
any individual representative might be doing but that the company was
not making any effort to draw Californians across state lines. He said
Eittreim's price break may have been part of a national promotion by
the company.

Checked-by: Rich O'Grady